Bar News - July 13, 2012
Opinion: Reject Amendments to State Constitution
Editorís Note: The following editorial appeared in the Concord Monitor on June 8, 2012, and is reprinted with permission.
In the final hours of the legislative session, Republican lawmakers passed two ill-conceived constitutional amendments that will go before voters on the November ballot. One would ensconce in the Constitution an ill-defined ban on taxing the income of a natural person; the other would take the authority to set the rules by which the courts operate away from the chief justice of the Supreme Court and award that power to the Legislature. Voters should reject both amendments.
Constitutions should not be tampered with lightly. They should be changed only when the need is great. Neither amendment is needed. Both would do more harm than good.
There is no reason to take rule-making power away from the courts. The existing system put an end to the absurdity that before 1978 saw each court operate as its own fiefdom with rules that differed from one court to the next.
Centralizing the rule-making authority in the hands of the systemís chief justice made operational rules consistent from court to court, streamlined the operation of the courts, and saved confusion and costs. It helped to insulate the court from political pressure and the ire of legislators angered by its decisions, and it showed fidelity to the constitutional concept of a separation of powers.
Voters knew what they were doing when they took the power to adopt the rules under which the courts operate out of the hands of a volunteer and largely lay Legislature and put it in the hands of those who actually know how courts operate: the systemís judges. Thatís where it should be.
As for the income tax ban, voters might see it as nothing more than waving the stateís unofficial "Ax the Tax" flag. Not so.
Real harm could come in the form of a lower bond rating and higher interest costs on state borrowing - since in a fiscal crisis lawmakers couldnít turn to an income tax.
Additionally, since virtually all taxes at some level are a tax on income, a constitutional ban on an income tax would also mean that the state would be tied up in court for years while the Supreme Court struggled to decide whether Tax A or Tax B could legally be considered a tax on income. The ban would straightjacket future legislatures and strip them of the ability to react quickly in a financial crisis or in the not entirely unimaginable event that crushing property tax burdens finally force owners to demand relief.
Certainly there is no appetite for a statewide income tax among the current crop of state lawmakers. But without it, at some point - and we may be already be near it - one of two things will happen. Either the services the state provides, including aid to those least able to care for themselves, will dwindle and New Hampshireís infrastructure deteriorate further, or existing taxes on business and property will increase significantly. The first is bad for the stateís economy. The second is grossly unfair.
Because New Hampshire relies more heavily on property taxes than perhaps any other state, it has a very regressive tax system.
In 2009, families earning less than $25,000 paid 8.3 percent of their income in state and local taxes, a figure that includes the property tax component of rent payments. Families in the $40,000 to $65,000 range paid 6.3 percent; those earning $102,000 to $204,000, 4.6 percent, and households with incomes of $480,000 or more paid just 2 percent. Those are the disparities that a constitutional ban on income taxes will preserve and increase. The poor and middle class will pay an ever-increasing share of their income to support state and local government, while the well-off pay less and less.
Voters should reject the income tax ban and the Legislatureís attempt to seize power from the courts.